Suppose the U.S. demand for Japanese cars increases. Which of the following would most likely result in the greatest increase in price?

Question

Quizplus · Accepted Answer

A quota would limit the quantity of Japanese cars that can be imported, creating a shortage and increasing the price due to higher demand and limited supply. Tariffs and export taxes would increase the price of Japanese cars, but not as much as a quota would. Voluntary import restraints are agreements between countries to limit exports voluntarily and would also not result in as much of an increase in price as a quota.